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Spatial Dimensions of Poverty in Eastern Europe and the Newly Independent States

October 08, 2003//9:00am — 1:00pm

This conference brought together scholars and professionals from Eastern Europe and the United States, linking colleagues in Moscow and Washington via a live video conference. The seminar addressed urban poverty in Eastern Europe and Eurasia, focusing on the difference in the quality of life between capital and secondary cities and reflecting on efforts aimed at ameliorating this disparity.Ellen Hamilton, World Bank, began the session with an overview of urban poverty in the region. Dr. Hamilton evaluated countries in the region in terms of income, provision and quality of services, and mobility. She noted that in general rural areas are poorer in terms of income, with a few exceptions, but with the exception of Armenia, the incidence of poverty in secondary cities is higher than that of capital cities. Regarding the Soviet legacy, she argued that the problem is now maintenance of the existing facilities in contrast with other developing regions need for new utility connections or housing, among other basic services. Dr. Hamilton also notes that countries where GDP has fallen more sharply tend to be those with higher rates of urban poverty. This suggests that the prolonged economic recession in these countries has had strong impacts on urban households. Julia Szalai, Institute of Sociology of the Hungarian Academy of Sciences, discussed the sudden disappearance of the differentiation between urban and rural poverty in official statistics in Hungary. She argued that this strategic shift led to less severe statistical indicators of poverty, which in turn has made the process towards EU membership easier. Secondary cities are at greater risk of poverty than capital cities. This is often due to their efforts to improve infrastructure, which has resulted in a reduction of social program and service spending, which disproportionately affects the poor, according to Dr. Szlai. The fall of the Soviet system has resulted in a development of ghettos as geographical units, which segregate the population by ethnicity and poverty. Advocating decentralization, Dr. Szlai claimed that if responsibility for local problems does not rest with local states, the poor will continue to bear the burdens of development.Anastassia Alexandrova, Urban Economics Institute Moscow, gave an informative presentation on the development of a scorecard for the Tomsk oblast region in Russia, which compares existing statistics relevant to development and monitors municipal development. The scorecard serves as a monitoring device, not a precise instrument, as its main users will be administrators of the Oblast. The goal of the scorecard is to improve the understanding of spatial issues and to increase stakeholder involvement in order to promote a wider discussion of development. In addition the project served to inform regional authorities of the lack of relevant statistics, which would enable outcome-effective measures instead of merely gross output or outlays of government money. Policy recommendations from the scorecard study include the need restructure enterprise, create incentives for localities to improve the efficiency of public services, and improve municipal statistics. Elizabeth McKeon, USAID, evaluated the effectiveness of USAID programs in the region. She commented that USAID has focused on systems and tools to alleviate poverty through education and assistance to workers in their adjustment between jobs while utilizing available skill sets. Ms. McKeon noted that the growth of the informal job sector is the root of a number of the problems and although the informal market serves as a stopgap, it ultimately diverts revenues, which could be used for social services. Two other obstacles to development in the region include the mentality that EU membership will solve most difficulties and continued corruption in government. Ms. McKeon stated that linking the creation of infrastructure and jobs would help alleviate the problems of poverty, unemployment, and poor infrastructure.Blair Ruble concluded the seminar, commenting that the main problems of many secondary post-socialist cities are their mono-industrial base and their isolated location. The new segregation occurring within cities, the lack of an adequate labor market, the legacies of war (in certain regions), and the health crisis of HIV/AIDS contribute to this growing problem of urban poverty. Dr. Ruble suggests that a change in the legal structure making it easier for local philanthropy to occur without tax penalties and legal troubles would also help generate momentum to alleviate poverty in the region.

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